The coronavirus pandemic has triggered unprecedented mass layoffs and furloughs, ranging from retail stores to restaurant chains to oil giants to financial services, and resulting in 10.7 unemployed Americans. In response to dramatic revenue losses, cost-cutting measures may be necessary for immediate survival. However, crises also present opportunities for growth, innovation and practicing kindness and compassion that can propel businesses during downturns and position them for a quick recovery.
Adam Smith’s Theory of Moral Sentiments reminds us that prudence and justice are needed for society to survive, and the beneficent actions enable it to flourish. Leaders can survive the challenges of a crisis while “being kind” and “doing good,” even if tough decisions such as furloughs and layoffs are required. By unlocking the full energy of an organization, leaders can latch onto the road to success by practicing the following:
• Adopt a growth and an innovation mindset. There are many reasons why innovation may not be an intuitive direction for leaders during a crisis. Innovation requires investment of resources that are limited at the time of a crisis. But crises can be the catalyst for innovation. In a recent McKinsey survey of more than 200 organizations across industries, three-quarters of executives agreed that the Covid crisis will create significant new opportunities for growth. The key is to be prepared to see and seize the opportunities emerging from a crisis. When Covid struck the world, Mondelēz International, food manufacturer of Cadbury and Oreo, joined businesses and entrepreneurs to help produce medical visors to protect front line healthcare staff in UK. The food maker repurposed its 3D printing technology, normally used to make chocolate sculptures, to help print the medical visors. Modelēz was quick to respond during the downturn, pivot with innovation, and address public demand for necessary equipment that would help society at large.
The reality is that most businesses simply cannot operate as they have in the past or in the normal time. Leaders need to take unconventional paths to beat the conventional odds of cost saving measures. This also means leaders should support innovation-led growth that may have lasting consequences for superior growth and performance postcrisis.
• Model compassion and kindness. How leaders make decisions, respond to demands, and treat employees is essential during a crisis and will have a lasting impact on employee behavior including engagement, productivity, and loyalty. This becomes ever more important during a public health crisis like the pandemic, where leaders must hold both business issues and people issues in each hand, and instill connection, empathy, and hope in their employees.
In the heat of the moment, compassion often gets lost when CEOs are in crisis management mode. Leaders need to be more intentional than ever to model compassion through specific day-to-day behaviors despite the limitations of a virtual work world. Leaders can demonstrate compassion practices through sending kind emails, texts, and personalized messages, having an authentic virtual presence (e.g., real home space as the backgrounds), and designating time to build trust and connection (e.g.be virtual happy hours). My research, with David Hofmann and Adam Grant, on help seeking in uncertain times shows when people need help, they prioritize trust and accessibility over expertise. When going through a crisis, employees may not want to share personal struggles and ask for help, but knowing that they can and their leaders care is what matters.
• Empower your best assets – people and teamwork. Leaders can bring new success with the same ingredients of employee engagement in the midst of a crisis. First, leaders need to empower employees and team members by instilling trust and confidence. Instead of questioning, doubting, or blaming, leadership should create an atmosphere of trust and safety. Second, involving those affected in the decision-making process and implementing those joint decisions timely is crucial to achieve a successful turnaround. When employees feel their voices are heard and decisions becomes a shared responsibility, people are motivated to offer up ideas, questions, concerns—which further breaks down barriers, builds trust, and boosts employee engagement. Third, leaders need to replace blame and denial with gratitude, and communicate it sincerely and often to their people. Gratitude is the gift that keeps on giving and an employee who feels appreciated will always do more than what is expected.
In times of crisis, the ideal of prudence, justice and beneficence is easier said than done. As Adam Smith sends the best calls for moral sentiments to “an impartial spectator” and suggest to constantly practice modeling the ideal, we urge leaders to do the same and make a habit of leading with realism, unorthodox thinking, compassion, and an inclusive mindset.